TSX finds support from reports of higher bids for Alcan; U.S. markets closed

The materials sector gave lift to the Toronto stock market Monday in quiet trading as investors took in word of other possible suitors for Alcan Inc. (TSX:AL) and rising metal prices boosted mining stocks.

U.S. markets were closed for the Memorial Day holiday. The S&P/TSX composite index was up 21.74 points to 14,045.81 late in the morning on lower than usual volume, with all sectors positive except energy amid falling oil prices.

Shares in Alcan were up $1.01 to $92.66 after the Sydney Morning Herald said Anglo-Australian mining company Rio Tinto PLC may be considering a US$27-billion-plus bid for the Montreal-based aluminum company.

Alcan's board has already urged shareholders to reject a C$33-billion cash-and-shares offer from U.S. competitor Alcoa Inc. on the grounds that the price is too low and completion of the merger is too uncertain.

The TSX Venture Exchange was down 10.29 points to 3,231.91.

The high-flying Canadian dollar eased 0.09 of a cent to 92.55 cents US a day before the Bank of Canada makes its next announcement on interest rates. The central bank is widely expected to keep rates unchanged.

The TSX energy sector lost 0.45 per cent as light sweet crude for July delivery dropped 90 cents to US$64.30 a barrel in electronic trading on the New York Mercantile Exchange, eased by the end of a Nigerian oil workers strike.

Petro-Canada (TSX:PCA) moved 91 cents lower to C$54.20.

The mining sector rose 1.5 per cent as copper prices rose overseas in response to ongoing strong demand from China. Teck Cominco Ltd. (TSX:TCK.B) rose 74 cents to $43.90.

Shares in FNX Mining Co. (TSX:FNX) jumped $2.80 to $34.34 after the company quadrupled its resource estimates for nickel, copper, platinum, palladium and gold at its properties in Sudbury, Ont.

The telecom sector gained 0.4 per cent, with Telus Corp. (TSX:T) ahead 72 cents to $65.95.

The Arriscraft International Income Fund (TSX:AIN.UN) is selling its manufactured stone, brick and masonry products business to General Shale Brick Inc. for $107 million.

The deal announced Monday is expected to result in proceeds to Arriscraft investors of $7.50 per unit and its units rose 11 per cent to $7.39.

After nearly seven weeks of wrangling, Liquor Stores Income Fund (TSX:LIQ.UN) and Liquor Barn Income Fund (TSX:LBN.UN) have struck a $222-million deal to combine the two alcohol retailers into a company with about 188 outlets in Alberta and British Columbia.

Liquor Barn units moved up 87 cents to $11.87, but Liquor Stores units eased 21 cents to $21.63.

The Newfoundland and Labrador government has approved the sale of FPI Ltd. (TSX:FPL) to Ocean Choice International and High Liner Foods Inc. (TSX:HLF). FPI shares were unchanged at $14.01 and High Liner ticked a penny higher to $9.56.

Overseas, the Paris CAC 40 edged up 13.66 points 6,071.15, while markets in Britain and Germany were on holiday.

In Tokyo, the Nikkei 225 index rose 106.38 points to 17,587.59, recouping some of Friday's 1.2 per cent drop. News of the suicide of Agriculture Minister Toshikatsu Matsuoka trimmed gains in the afternoon.

In Hong Kong, the Hang Seng index rose 9.10 points to 20,529.76.

Mainland Chinese stocks surged to new highs as investors were reassured by the lack of any government market-cooling measures.

The Shanghai composite index gained 2.2 per cent to 4,272.11 on record turnover of 261.1 billion yuan (US$34.4 billion).

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